• Maurice Wilson

Ep 30: More Money, More Taxes with Ashlee Brooks

Guest: Ashlee Brooks, Owner, Brooks & Associates Tax Consulting


Summary:



When it comes to taxes, alas, it’s never too soon to get started. Which is why this episode of The Wilson Wealth Show is focused on helping you get ahead of the curve with leading-edge advice from tax expert Ashlee Brooks. As the owner of Brooks & Associates Tax Consulting, she’s dedicated not only to preparing filings but also educating her clients about the role smart tax strategy plays in building wealth and a worry-free retirement.


This conversation covers a range of topics relevant for business owners trying to decide whether or when to convert to S corp status, including potential write-offs. Ashlee also makes the case for investing early and at the maximum possible in retirement vehicles, protecting and growing dollars that would otherwise wind up going to the IRS. She and Maurice get specific about investment decisions that will monetize your hard-earned income well into the future. New cars and fancy houses are great, but if you want to build transgenerational wealth, your financial plan has to include an element of savvy tax strategy. This episode of Wilson Wealth breaks down exactly why – and how to get started!


You can reach out to Ashlee at her website or via @LinkedIn and @Insta.


We hope you enjoyed this episode and will continue to join us for more lively conversations planned for the year ahead. Please click here to listen to previous shows recorded in 2021!




Key Quotes:


“It’s all about buying low and hoping if (the market) goes lower you have more capital to deploy at those prices.” (Maurice)


“When I’m speaking with a client, we’re not just preparing a tax return one time a year. We’re reviewing the tax return, looking line by line to understand their income, how it’s calculated and the tax liability.” (Ashlee)


“I’m really big on education to help people to be proactive because … tax returns are a key way of getting closer to (financial) goals.” (Ashlee)


“The average person doesn’t understand a balance sheet, but the biggest component is net worth. Whether it’s your net worth personally or the net worth of your business, that tells what type of ownership you have.” (Ashlee)


“If your net profit is $30k or more, that is the ideal time where you would want to look at being elected as an S corp.” (Ashlee)


“The biggest key to being an S corp from an LLC standpoint is that the money you’re paying yourself gets a bit of a write-off and that’s a huge way to save on taxes.” (Ashlee)


“(LLCs and S corps) may not be beneficial for everybody. They can put a lot of people in a hole or put them in a position to be audited.” (Ashlee)


“If you can put money into a 401k, an IRA, one of those vehicles to save you on taxes, why would you not do that? Why would you rather pay the IRS thousands of dollars when you could have put that money into your retirement and reduce your tax liability?” (Ashlee)


“The mindset has to shift in terms of how we think about spending money … Would you rather pay your future self or the IRS?” (Ashlee)


“Investments are how you monetize a lifetime worth of work. It’s your exit strategy … You may have the cars and houses and bank account, but is anything growing when you stop working?” (Maurice)



What We Covered:

2:30 – Intros

3:33 – In the current market climate, there are stock and retirement investment opportunities to consider in terms of improving your tax basis.

4:46 – Ashlee talks about tax education and her role in helping clients understand how to plan for and build transgenerational wealth.

6:30 – Ashlee a recent presentation she gave about requirements for self-employed individuals seeking to purchase a home.

7:53 – It’s not generally within the realm of financial advisors’ expertise, but nonetheless very important to have an accurate base financial statement at the ready (for retirement planning or to secure a loan, for instance). That’s where tax planning experts like Ashlee come in!

12:38 – Ashlee shares the ins and outs of S corps. Who needs them and why? What’s the difference between an LLC and a “C” corporation?

14:45 – There are benefits to consider when deciding when/whether to become an S corp:

· You can start paying yourself as a W-2 employee and secure a write-off on the salary.

· You can offer yourself a bonus that will be taxed at a more favorable rate.

16:45 – Ashlee and Maurice break down the potential tax savings associated with converting to an LLC, including a significant reduction in onerous self-employment taxes for things like social security and Medicare.

20:30 – Timing is everything. Ashlee helps clients figure out not only whether to convert to an LLC but also determine when it makes sense in light of compliance, filing requirements and other variables.

23:20 – No matter your background, your status, your class, Ashlee believes it’s critical that you understand how taxes work. Not every detail, but at least the basics and some strategies to protect your best interests as you grow your money.

25:15 – Ashlee breaks down the basics on various retirement investment vehicles (SEP IRA and solo 401k). It’s a win-win: Reduce tax burden and invest in retirement. It’s a matter of mindset!

30:10 – Time flies. Even if you’re relatively young, it’s never too soon to take advantage of retirement investing and the tax benefits it confers.

34:10 – In combination with sound investments, smart tax strategy plays a huge role in overall wealth building.



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